Yuan surges to 25-month high as global use rises amid dollar sell-off
Onshore yuan rises 0.67 per cent to 6.4259 against the dollar, marking its strongest level since December 2015
The yuan surged to its highest level in 25 months due to a sell-off in the US dollar, and after Germany’s central bank said it had decided to include China’s currency in its foreign exchange reserves, reflecting its increased use by its biggest trading partners.
Traders were selling US dollars as the euro continued to rally after last week’s hawkish minutes by the European Central Bank. Companies attempting to hedge against yuan depreciation risk by buying US dollars and selling yuan in the forward market were suffering seriously, analysts said.
The decision comes after the ECB in June switched €500 million (US$609.9 million) worth of its US dollar reserves into yuan, and after the central banks of Russia and South Korea had also expressed interest in doing so.
Onshore yuan rose 0.67 per cent to 6.4259 against the dollar, marking its strongest level since December 2015. The offshore yuan also gained 0.45 per cent to 6.4319 per dollar, again, the strongest since December 2015.
